Guess what? On average, the investment banking sector pays graduates the most.
Research firm High Fliers asked Bank of America Merrill Lynch, Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley, RBS and UBS how much they're paying their UK graduate entrants for 2015. The answer? Graduate salaries in investment banks average £45k ($68k), As the chart below shows, this makes investment banks the highest paying employer category for graduates.
Source: High Fliers.
And yet, there's a possibility that High Fliers' figures for banking pay are behind the times.
Graduate recruiters in London say [efc_twitter text="banks have been hiking salaries for graduates who will start in 2015. The going rate has reportedly been increased from £45k to £50k."]
"Some banks - like Barclays - have been sending out updated contracts with the new graduate salaries," says one London recruiter. Barclays declined to comment, although rival recruiters confirmed the contracts' existence. The increase is only said to apply to graduates going into investment banking (IBD).
Andy Pringle, managing director of recruitment firm Circle Square, said graduates going into IBD across the City of London are having their salaries hiked to match last summer's pay rises on Wall Street. The going rate for a first year analyst (a new graduate) is now $85k (£56k), said Pringle. This rises to $90k (£60k) in the second year, and to $95k (£63k) in the third year. In most cases, Pringle says the pay rises won't be implemented in the City until the next wave of analysts arrives in July 2015 - although some boutiques are taking the initiative and hiking salaries early.
Salaries in the City are typically supplemented with sign-on bonuses and end of year bonuses.[efc_twitter text=" In 2011, RBS was alleged to be paying graduates a £45k bonus, a £10k guaranteed bonus and a £7k sign-on. "]
However, pay isn't the only front in the battle to attract graduates into banking. A spokesman for Barclays says the bank is increasingly focused on giving its new entrants, "an attractive and interesting career experience with plenty of scope for development." As we reported previously, the bank has been investing heavily in making life more pleasant for its juniors.
Whether it's salary or working conditions, banks as a whole seem to be doing something right. High Fliers reports that applications to investment banks rose by 16% for 2014-2015 - more than any other industry. At the same time, graduate jobs in investment banking rose only 2.4%, suggesting the industry has become harder to enter than ever.